BRADENTON, Fla. — The reconstituted board of the Florida Development Finance Corp. on Tuesday delayed reconfirming the agency's prior decision to be the conduit for $1.75 billion in private activity bonds for the controversial All Aboard Florida private passenger train.
The three FDFC board members recently appointed by Florida Gov. Rick Scott voted to remove an Aug. 20, 2014 resolution pertaining to the passenger train project from a larger resolution ratifying the actions of former board members.
The ratification of past actions was sought because some prior board members were never confirmed by the Senate or their terms ran out and they were not notified, said the FDFC's attorney, Joseph Stanton of Broad and Cassel.
On Aug. 20, 2014, the prior FDFC board approved a resolution stating that the agency intended to serve as the conduit issuer for All Aboard's bonds, and authorized the train company to prepare the transaction. The FDFC still must give final approval before the bonds can be issued.
Delaying action on the resolution, however, may not be that meaningful because Stanton told the board that FDFC staff, as part of the duties delegated to them, had also signed "less formal but still binding" documents stating that the agency intended to issue All Aboard's bonds.
Six speakers spoke against the project at Tuesday's meeting, and some asked FDFC to relocate an April 20 public hearing currently scheduled to be held in Tallahassee, the state's capital. The hearing is to comply with Internal Revenue Service requirements for qualified private activity bonds under TEFRA, the Tax Equity and Fiscal Responsibility Act of 1982.
Attorneys representing Indian River and Martin counties said at Tuesday's meeting that they believed both the Aug. 20 meeting notice and the resolution pertaining to All Aboard Florida were defective.
"We believe there are profound deficiencies with automatically ratifying the events of last August that would embarrass this body going forward," said Martin County's attorney, Steven Ryan, a partner at McDermott Will & Emery LLP in Washington, D.C.
Ryan said that most members of the public, Congress, and the state Legislature were unaware of the bonding request, which only became known months later through various publications.
The U.S. Department of Transportation allocated the private activity bonds in December. All Aboard plans to use bond proceeds on its facilities in Miami-Dade, Broward, Palm Beach, Brevard and Orange counties.
"We truly believe that it's unconscionable that FDFC would move forward on supplying the financing for this effort based on the terrible disasters that will befall our community," said Susan Mehiel of Vero Beach, which is in Indian River County.
"This is probably the most controversial project I've ever worked on," Stanton said while suggesting that the board delay taking action to reconfirm All Aboard's Aug. 20 resolution.
He also said FDFC has not received any information on the structure of the bond deal or offering materials, and it could take "several months" to develop the documentation necessary for the board to take the final step of authorizing the bonds to be sold.
While speakers asked for the TEFRA hearing to be held closer to the area impacted by the project, Stanton said that the hearing must be conducted in Tallahassee because the governor appoints FDFC board members. He also said that anyone can submit written comments.
